Hall v Lindsay Brothers Management Pty Limited
[2021] NSWPICPD 31
•6 October 2021
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER | |
| CITATION: | Hall v Lindsay Brothers Management Pty Limited [2021] NSWPICPD 31 |
| APPELLANT: | Adam Hall |
| RESPONDENT: | Lindsay Brothers Management Pty Limited |
| INSURER: | Employers Mutual NSW Limited |
| FILE NUMBER: | A1-4146/20 |
| PRESIDENTIAL MEMBER: | Acting Deputy President Geoffrey Parker SC |
| DATE OF APPEAL DECISION: | 6 October 2021 |
| ORDERS MADE ON APPEAL: | 1. Order 1(b) of the Certificate of Determination is revoked. 2. The matter is remitted to the Arbitrator to determine the appellant’s PIAWE after the first 52 weeks of weekly payments in accordance with these reasons. |
| CATCHWORDS: | WORKERS COMPENSATION – Pre-injury average weekly earnings (PIAWE) – s 44C and s 44E of the Workers Compensation Act 1987 – calculation of PIAWE in accordance with Enterprise Agreement – whether or not earnings calculated on the basis of ordinary hours worked – calculation of PIAWE for first 52 weeks and calculation of PIAWE after the first 52 weeks |
| HEARING: | On the papers |
| REPRESENTATION: | Appellant: |
| Mr R Goodridge, counsel | |
| Schofield King Lawyers | |
| Respondent: | |
| Mr R Slocombe, solicitor | |
| Hall & Wilcox | |
| DECISION UNDER APPEAL | |
| MEMBER: | Ms J Peacock |
| DATE OF MEMBER’S DECISION: | 27 January 2021 |
BACKGROUND AND INTRODUCTION
Mr Hall was employed by Lindsay Brothers Management Pty Limited as a B-Double line haul driver.
On 4 October 2018 he sustained injury to the back.
Liability to make payments of compensation for his injuries was accepted.
Although he had never seen the agreement, Mr Hall’s employment was subject to the Lindsay Transport Enterprise Agreement 2015 (the EA). That Agreement was approved by the Fair Work Commission and commenced to operate on 28 October 2015. It had a nominal expiry date of 30 June 2019.
The summary of the dispute contained in the icare review dated 29 May 2020 provides context to the parties’ dispute and the appeal.
On 26 April 2019 the insurer, Employers Mutual NSW Limited (EML), made a calculation of Mr Hall’s pre-injury average weekly earnings (PIAWE). It found the PIAWE to be $2,101.41 comprised of the following elements:
(a) $1,110.87 in ordinary earnings;
(b) $985.79 in overtime, and
(c) $4.75 in shift allowances.
On 3 December 2019, EML advised Mr Hall that he had received 52 weeks of weekly benefits and that from 17 December 2019 the overtime and shift allowance components of the PIAWE would be removed so that the continuing weekly benefit would be based on Mr Hall’s ordinary earnings. After indexation the continuing weekly benefit would be based on amount of $1,120.00 per week.
On 13 February 2020 and 5 May 2020 reviews of the insurer’s calculation of the PIAWE by icare Workers Insurance (icare) were requested.
On 19 May 2020 icare completed the review. It found the relevant period to be 45 weeks (taking into account the weeks of unpaid leave); that the total ordinary earnings across the 45 week relevant period were $48,875.13 resulting in a weekly average of $1,086.11; the total overtime and shift allowances across the 45 week relevant period were $43,973.78 resulting in a weekly average of $977.20 for overtime and shift allowances.
The icare review concluded the PIAWE for the first 52 weeks was $2,063.31. Pursuant to s 44C(1)(b) of the Workers Compensation Act 1987 (the 1987 Act) the overtime and shift allowances for the post 52 week benefit period were removed resulting in PIAWE for the period after the first 52 weeks of $1,086.11. This amount was indexed to provide a then current PIAWE of $1,120.
The dispute between the parties before the Arbitrator was summarised in the Statement of Reasons as follows:
“6. The applicant seeks an award of weekly compensation based on a PIAWE rate of $2,324.06. The applicant relies on this rate for the first 52 weeks and submits that this rate also applies after 52 weeks.
7. The PAIWE [sic] rate of $2,324.06 includes an allowance for remote travel.
8. In the alternative for the first 52 weeks, removing the allowance for remote travel, the applicant seeks an award of weekly compensation based on a PIAWE rate of $2,143.73.
9. The respondent disputes that the rate is $2,324.06. The respondent relies on the icare review notice dated 19 May 2020 and submits that the rate for the first 52 weeks is $2,063.31 and after 52 weeks is $1,086.11 subject to indexation.”[1] (emphasis added)
[1] Hall v Lindsay Brothers Management Pty Limited [2021] NSWWCC 29 (reasons), [6]–[9].
CERTIFICATE OF DETERMINATION
On 27 January 2021 (incorrectly dated 2020) the Workers Compensation Commission issued a Certificate of Determination as follows:
“1. The Applicant to be paid by the Respondent weekly compensation as follows:
(a)From 8 October 2018 based on a PIAWE rate of $2,143.73 per week,
(b)The Respondent to pay the Applicant weekly compensation from 17 December 2019 based on a PIAWE of $1,166.53 and subject to indexation, with the Respondent to have credit for payments made.
2. The parties to have liberty to apply within 14 days as to the form of order.”
THE ARBITRATOR’S STATEMENT OF REASONS
In submissions to the Arbitrator dated 18 August 2020, Mr Hall asserted that there were three issues to be determined:
(a) PIAWE first 52 weeks
(i)icare’s mistaken double elimination of REMSERV [a form of salary sacrifice]
(ii)remote travel
(b) Post 52 weeks section 44E(1)(b) not s 44E(1)(a).
I have underlined in paragraph [11] above a contention recorded by the Arbitrator (at [6] of the reasons) as advanced by the appellant that the pre and post 52 week PIAWE should be the same because the Arbitrator does not appear to deal with that contention expressly although in the result it was plainly rejected.
The grounds of appeal challenge the Arbitrator’s application of s 44E of the 1987 Act but there is no ground of appeal challenging the Arbitrator’s conclusion that overtime and shift allowances are to be removed for the period of weekly benefit commencing at the end of 52 weeks. There is no written submission by the appellant in support of the contention. Accordingly the contention advanced in the underlined portion of paragraph [11] is not considered in the appeal.
The Arbitrator found as follows:
“33. I am satisfied given the wording of the dispute notice and persuaded by the calculation identified by the applicant’s counsel that the REMSERV deduction of $157.52 per week has been wrongly excluded. This needs to be added back in.
34. As to remote travel allowance I am not persuaded it should form part of the calculation of PIAWE as it is an allowance that goes toward ameliorating expenses when travelling to remote areas. It is only payable when the applicant travels to a remote area. It cannot therefore form part of PIAWE.
35. In the event [that] this was my finding, the applicant’s counsel provided the alternative calculation as follows:
‘For convenience I have calculated the alternate findings for PIAWE including Remserv but not remote travel $2,143.73.’
I find that the PIAWE for the first 52 weeks is $2,143.73. This is the amount sought by the applicant if remote travel was to be excluded. I note that this represents a difference with icare’s calculations of $80.42 per week (that is $2,143.73 minus $2,063.31 equals $80.42 per week.) This additional weekly amount will be payable to the applicant. The order I will make for the first 52 weeks will be as follows:
·The applicant to be paid by the respondent weekly compensation from 8 October 2018 based on a PIAWE rate of $2,143.73 per week, with the respondent to have credit for payments made.”
The appeal does not challenge those orders. The appeal is concerned with the PIAWE after the first 52 weeks.
Before the Arbitrator, the appellant submitted that the issue turned on whether s 44E(1)(b) of the 1987 Act applied. The essence of the submission was that s 44E(1)(a) did not apply because Mr Hall’s base rate of pay was not calculated on the basis of ordinary hours worked.[2]
[2] Reasons, [39].
The respondent submitted that the EA calculated Mr Hall’s base rate of pay on the basis of ordinary hours worked. The EA provided in clause 5.2 for overtime. The consequence was that the overtime and shift allowance component of the PIAWE calculation was required to be removed after the first 52 weeks in accordance with s 44C(1)(b) of the 1987 Act.[3]
[3] Reasons, [40].
In addition the respondent submitted that the calculation made by icare and the subject of the Review Notice of 19 May 2020 were correct as to the classification of ‘ordinary earnings’ and ‘overtime and shift allowance’.[4]
[4] Reasons, [40].
The Arbitrator addressed the applicant’s submission that he was paid on the basis of kilometres travelled as evidenced by the payslips by reference to the “totality of the evidence and in this case, a fair work instrument applies.”[5]
[5] Reasons, [46].
She said at [48] of the reasons:
“Section 44H(a)(i) provides that in the case of a worker to whom a fair work instrument applies, then ‘if the ordinary hours of work are agreed or determined in accordance with a fair work instrument between the worker and the employer’ - those hours are the ordinary hours of work.”
The Arbitrator analysed and referred to paragraphs 3.1, 4.11, 4.1.3, 5.1 and 5.2 of the EA. She found that the fair work instrument defined the applicant’s earnings as a full-time employee to comprise ordinary hours of work plus overtime.[6]
[6] Reasons, [50].
She said that under the fair work instrument the applicant’s ordinary hours of work were deemed to be 38 hours per week and concluded:
“The Fair Work instrument converts the kms travelled to ordinary hours of work such that there is a base rate of pay which is separate from overtime and shift allowances. I am persuaded by the respondent’s submissions in this regard. As overtime does not form part of the PIAWE after 52 weeks, this means that there is in fact a step down in the PIAWE after 52 weeks.”[7]
[7] Reasons, [52].
The final issue with which the Arbitrator dealt concerned the amounts paid to the applicant for “pick up and delivery” (PUD). She concluded:
“The PUD is defined by the fair work instrument as not forming part of the ordinary hours of work but is paid on an hourly basis. The PUD does not equate to commission commonly understood to be based on sales and the PUD does not equate to piece rates commonly understood to be payment by piece instead of an hourly or weekly rate. The fair work instrument defines the pay arrangements for the applicant to comprise ordinary earnings and overtime. When regard is had to all of the evidence the PUD effectively comprise an overtime or shift allowance paid on an hourly basis and is not payable after 52 weeks.”[8]
[8] Reasons, [55].
The Arbitrator’s finding so far as the PUD was concerned was:
“The effect of these findings is that the PIAWE steps down after 52 weeks to comprise ordinary earnings and to exclude overtime and does not include PUD.”[9]
[9] Reasons, [56].
The appellant does not challenge that finding.
In the result the Arbitrator determined that from 17 December 2019, that is the period after the first 52 weeks of weekly compensation, the continuing rate of weekly compensation should be based on a PIAWE of $1,166.53. She recorded that the respondent should have credit for payments made.
THRESHOLD MATTERS
There is no dispute that the threshold requirements as to quantum and time pursuant to sections 352(3) and 352(4) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) have been met.
ON THE PAPERS
The parties submit that the appeal can be decided on the basis of the written application and any written notice of opposition.
Section 52(3) of the Personal Injury Commission Act 2020 (the 2020 Act) provides:
“(3) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act and enabling legislation without holding any conference or formal hearing.”
Procedural directions PIC2 and WC3 provide that I may be satisfied that the documents and submissions of the parties provide me with sufficient information so that the appeal can be determined on the papers without holding any formal hearing. I am satisfied that this is an appropriate matter to proceed “on the papers” without holding any conference or formal hearing.
THE NATURE OF THE APPEAL PURSUANT TO SECTION 352(5) OF THE 1998 ACT
I exercise the jurisdiction provided in subsection 352(5) which provides:
“(5) An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.”
PROCEDURAL MATTERS AND THE TRANSFER OF THE MATTER FROM THE WORKERS COMPENSATION COMMISSION TO THE PERSONAL INJURY COMMISSION
The appeal was registered with the Workers Compensation Commission on 23February 2021. The Workers Compensation Commission was abolished and replaced by the Workers Compensation Division of the Personal Injury Commission by operation of the 2020 Act from 1 March 2020.
The 2020 Act amended the 1998 Act such that the arbitrators of the former Workers Compensation Commission became non-presidential members of the Personal Injury Commission. The amendments allow for appeals from decisions of the members of the Personal Injury Commission to a Presidential member of the Workers Compensation Division of the Personal Injury Commission in accordance with s 352 of the 1998 Act.
It is necessary to set out part of the procedural history.
As noted above, the appeal was lodged by a document dated 23 February 2021.
The application did not comply with the procedural requirements of s 352 of the 1998 Act and a Direction was issued by the Workers Compensation Commission requiring the appellant to file amended submissions which:
“(a) briefly, but specifically, sets out the grounds of appeal, identifying the respects in which error of law, fact or discretion is alleged to have occurred as well as any material findings it is said the Arbitrator should or should not have made, and any material facts it is said the Arbitrator should or should not have found;
(b) contain appropriate subheadings, which separately address each ground/s of appeal;
(c) has attached an objective chronology of events that includes references to the page number where the evidence is to be found in the Application to Resolve a Dispute, Reply or Application to Admit Late Documents, and
(d) contains a list of authorities.”
That Direction was complied with by the appellant’s solicitors under cover of their letter of 5 March 2021.
There was a further Direction on 8 March 2021 as follows:
1. By 15 March 2021, the appellant is to serve on the respondent a sealed copy of the Application – Appeal Against Decision of Member, the amended submissions lodged on 8 March 2021, and a copy of this Direction.
2. Within seven days of service of this application, the appellant is to lodge with the Commission a Certificate of Service (Form 4) certifying service of the application and standard direction on the respondent.
3. By 22 March 2021, the appellant is to file and serve any supplementary submissions it wishes to make in respect of the transcript.
4. By 12 April 2021, the respondent is to lodge with the Commission a Notice of Opposition (Form 9A) and supporting documentation.
Any submissions by the respondent in respect of the transcript must be lodged with the Commission and served on all other parties together with the Notice of Opposition.
5. By 19 April 2021, the respondent is to serve on all parties to the appeal a sealed copy of the Notice of Opposition (Form 9A) and supporting documentation.
6. Within seven days of service of the Notice of Opposition, the respondent is to lodge with the Commission a Certificate of Service (Form 4) certifying service of the Notice of Opposition on all other parties to the appeal.
7. By 3 May 2021, the appellant may lodge with the Commission and serve on the respondent submissions in reply if required, and the appellant is to lodge a Certificate of Service (Form 4) certifying service of the submissions in reply on the respondent.”
The respondent filed a Form 9A dated 12 April 2021.
The Personal Injury Commission issued a further direction on that occasion, which amongst other things provided:
“Direction [7] of the Direction dated 8 March 2021 is revoked and the following Directions are made in its place:
(a) On or before 4.30 pm on Monday 26 April 2021, the respondent is to lodge amended submissions in support of its Notice of Opposition that address each ground of appeal separately under appropriate subheadings.
(b) By 10 May 2021, the appellant may lodge with the Commission and serve on the respondent submissions in reply if required, and the appellant is to lodge a Certificate of Service (Form 4) certifying service of the submissions in reply on the respondent.”
Pursuant to those Directions the appellant’s submissions are dated 5 March 2021 and the respondent’s submissions are dated 16 April 2021.
GROUNDS OF APPEAL
The Appellant lodged two sets of submissions. The first contained 3 grounds of Appeal was rejected by the PIC. The second set of submissions are those that formed the basis of the Appeal are dated 5 March 2021, and identify only 2 grounds of appeal as follows:
“The applicant appeals the Arbitrator’s finding in relation to the calculation of PIAWE post 52 weeks on the grounds:
1. The Arbitrator erred in conflating the definitional provisions in an Enterprise Agreement with the statutory test in s 44E which requires a bifurcated test of whether or not the earning were, in fact, calculated on the basis of ordinary hours worked.
2. The Arbitrator erred in fact and law in finding that the appellant’s earning were ‘calculated on the basis of ordinary hours worked’.” (emphasis in original)
Ground 1 – The Arbitrator erred in conflating the definitional provisions in an Enterprise Agreement with the statutory test in s 44E which requires a bifurcated test of whether or not the earning were, in fact, calculated on the basis of ordinary hours worked
Appellant’s submissions
The appellant submits that the Arbitrator’s conclusion at [51] of the reasons that “[u]nder the fair work instrument, the applicant’s ordinary hours of work are deemed to be 38 hours per week. The fair work instrument converts the kms travelled to ordinary hours of work …” has to be understood contextually.
To this end the appellant submits:
“… Under the Enterprise Agreement a trip between two locations was, firstly, deemed to be a predefined number of kilometres travelled whether in fact the trip was actually that number of kilometres. Clause 6 of Sch 1 provides that the distances are deemed so that detours and actual distances are ignored. Matters such as detours, new road openings, etc were ignored. Similarly, actual time worked [was] ignored. Matters such as good or bad traffic conditions were ignored.”[10]
[10] Appellant’s submissions, [4].
The appellant then develops this theme by observing that the EA provides in effect a number of deeming provisions which result in the actual number of kilometres driven being ignored, in favour of various deemed or assumed travelled distance(s). The submission is that the EA “assume[d] that the driver would travel the deemed distance of 2,515 in 38 hours and be paid for these deemed 2,515 kms at a rate commensurate with an award payment for 38 hours of work.”[11]
[11] Appellant’s submissions, [5].
By clause 12 of the EA, Mr Hall’s rates are determined by clause 5 of Schedule 1 to the EA. The rates provided for in clause 5 of Schedule 1 are “said to be calculated taking into account ‘all allowances, penalties and any other remuneration which would otherwise apply to employees under any applicable Award(s)’.”[12] It is submitted that Mr Hall would not have received those payments under the Award because they are averaged into the kilometre rates paid by the employer to the worker.
[12] Appellant’s submissions, [7].
The appellant addresses specifically clauses 5.1 and 5.2 and by reference to a number of examples asserts that the examples “demonstrate that the Applicant was not paid according to the hours he worked. Rather the worker was paid at a set rate per deemed kilometre driven.”[13]
[13] Appellant’s submissions, [16].
Respondent’s submissions
The respondent’s amended submissions are dated 16 April 2021.
It submits that the Arbitrator did not err in determining that the PIAWE after the first 52 weeks was reduced because:
“14. It is clear from the relevant EA and the appellant’s pay slips that his earnings were separated into different categories depending on the nature of the work.
15. These different categories can be considered as either ordinary earnings (base rate of pay) or overtime or shift allowances respectively. It was entirely appropriate for the learned Arbitrator to consider the appellant’s payslips and EA as they are both relevant for the calculation of PIAWE in accordance with ss 44C and 44E of the 1987 Act. The respondent submits that the appellant’s submissions regarding the nature of his work and deemed distances travelled as opposed to actual kilometres driven are misguided and confuse the issue at hand.
16. As submitted above, the learned Arbitrator correctly applied the provisions of ss 44C to 44H of the 1987 Act in determining the calculation of the appellant’s PIAWE which included both his ordinary earnings and amounts of overtime and shift allowances. She correctly determined that the appellant’s PIAWE would be reduced after the first 52 weeks as any shift allowance or overtime component of PIAWE is removed at this stage.”
The relevant legislative provisions
Section 32A of the 1987 Act provides that a “fair work instrument” means:
“(a) a fair work instrument (other than an FWA order) within the meaning of the Fair Work Act2009 of the Commonwealth”.
It is not disputed that the Lindsay Transport Enterprise Agreement 2015 is accordingly a fair work instrument.
Section 44C of the 1987 Act provides so far as is relevant:
“Definition—pre-injury average weekly earnings
(1) In this Division, pre-injury average weekly earnings, in respect of a relevant period in relation to a worker, means the sum of:
(a)the average of the worker’s ordinary earnings during the relevant period (excluding any week during which the worker did not actually work and was not on paid leave) expressed as a weekly sum, and
(b)any overtime and shift allowance payment that is permitted to be included under this section (but only for the purposes of the calculation of weekly payments payable in the first 52 weeks for which weekly payments are payable).
…
(5) An overtime and shift allowance payment is permitted to be included in the calculation of pre-injury average weekly earnings (but only for the purposes of the calculation of weekly payments payable in the first 52 weeks for which weekly payments are payable) if:
(a) the worker worked paid overtime or carried out work that attracted a shift allowance during the relevant period, and
(b) the worker would, but for the worker’s injury, have been likely, at any time during that 52 week period, to have worked paid overtime or carried out work that attracted a shift allowance.
…”
Section 44D defines the relevant period in relation to pre-injury average weekly earnings of a worker. In the case of Mr Hall this is the period of 52 weeks immediately before the injury: s 44D(1)(a).
Section 44E provides:
“Definitions applying to pre-injury average weekly earnings—ordinary earnings
(1) Subject to this section, in relation to pre-injury average weekly earnings, the ordinary earnings of a worker in relation to a week during the relevant period are:
(a)if the worker’s base rate of pay is calculated on the basis of ordinary hours worked, the sum of the following amounts:
(i)the worker’s earnings calculated at that rate for ordinary hours in that week during which the worker worked or was on paid leave,
(ii)amounts paid or payable as piece rates or commissions in respect of that week,
(iii)the monetary value of non-pecuniary benefits provided in respect of that week, or
(b)in any other case, the sum of the following amounts:
(i)the actual earnings paid or payable to the worker in respect of that week,
(ii)amounts paid or payable as piece rates or commissions in respect of that week,
(iii)the monetary value of non-pecuniary benefits provided in respect of that week.
(2) A reference to ordinary earnings does not include a reference to any employer superannuation contribution.”
Section 44G provides:
“Definition applying to pre-injury average weekly earnings and current weekly earnings—base rate of pay
(1) In relation to pre-injury average weekly earnings and current weekly earnings, a reference to a base rate of pay is a reference to the rate of pay payable to a worker for his or her ordinary hours of work but does not include any of the following amounts (referred to in this Division as base rate of pay exclusions):
(a)incentive based payments or bonuses,
(b)loadings,
(c)monetary allowances,
(d)piece rates or commissions,
(e)overtime or shift allowances,
(f)any separately identifiable amount not referred to in paragraphs (a) to (e).
(2) In relation to pre-injury average weekly earnings and current weekly earnings, if, at the time of the injury:
(a)a worker’s base rate of pay is prescribed by a fair work instrument that applies to the worker, and
(b)the worker’s actual rate of pay for ordinary hours is higher than that rate of pay,
the worker’s actual rate of pay is to be taken to be the worker’s base rate of pay.”
Section 44H relevantly provides:
“Definition applying to pre-injury average weekly earnings and current weekly earnings—ordinary hours of work
In relation to pre-injury average weekly earnings and current weekly earnings, the ordinary hours of work:
(a) in the case of a worker to whom a fair work instrument applies are:
(i)if the ordinary hours of work in relation to a week are agreed or determined in accordance with a fair work instrument between the worker and the employer —those hours, or
(ii)in any other case, the worker’s average weekly hours (excluding any week during which the worker did not actually work and was not on paid leave) during the relevant period, or
(b) in the case of a worker to whom a fair work instrument does not apply:
…”.
The Lindsay Transport Enterprise Agreement 2015 (EA)
The Agreement applies to all employees of Lindsay Brothers Management Pty Limited and provides in clause 12.1 that the rates of pay for line haul employees are specified in clause 5 of Schedule 1.
Schedule 1 applies to Mr Hall.[14]
[14] Clause 2.1(b), Reply, p 71.
A full-time employee is defined as “an employee engaged by an employer for an average of up to 38 ordinary hours per week, calculated over a four week period.”[15]
[15] Clause 3.1, Reply, p 72.
Clauses 4 and 5 relevantly provide:
“4.1 Ordinary Hours of Work & Over-time
4.1.1Ordinary hours of work will be a maximum of 38 per week, which may be averaged over a period not in excess of 28 days.
4.1.2Subject to 4.1.1, the ordinary hours for each driver covered by this schedule are the number of hours required to complete the kilometres specified in the table contained [in] 5.2. All time worked after the specified kilometres have been completed is overtime and the rate of payment for such overtime shall be the kilometre rate set out in clause 5.2 for the applicable classification.
4.1.3Subject to 4.1.1, the ordinary hours of for each Set Distribution Driver and linehaul employee performing work covered by this schedule are the number of hours required to earn the applicable minimum weekly rate specified in 5.1, by applying the methodology contained in clause 5. All time worked after such amounts have been earned pursuant to clause 5.3 or 5.4 will be over-time and any payment made in relation to such work will be a payment in respect of over-time.
4.1.4Employees may be required to work a reasonable amount of over-time.
…
5. Pay rates
5.1 Linehaul employees, other than casuals, will be paid the following minimum weekly retainers in recognition of, and remuneration for, their ordinary hours of work (as prescribed in clause 4 of this Schedule). This will be dependent upon the employee being ready willing and able to perform their base weekly kilometres during the relevant weekly period:
Classification
Current relevant minimum weekly retainer (weekly base rate of pay)
Equivalent hourly rate (for purposes of leave under the NES)
Daily base kilometres
Weekly base kilometres
B-Double Drivers/Set Distribution – B-Double Drivers
$1,055.28
$27.7705
503
2,515
In the event that a driver does not perform the weekly base kilometres, and provided this is not a consequence of such work not being allocated to them, they will be paid for the actual number of kilometres travelled at the rates specified in 5.2
5.2 In addition to the weekly retainers (set out in clause 5.1) full-time linehaul employees will be paid the following kilometre rates by way of remuneration for all overtime worked (as described in clause 4.12 of this Schedule) in travelling kilometres which are in excess of the weekly base distances set out for each linehaul employee classification:
Classification
Kilometre rate
B-Double Drivers/Set Distribution – B‑Double Drivers
$0.4196 per kilometre for every kilometre in excess of 2,515 kilometres
…
5.3 In recognition of the special circumstances for Set Distribution – Single Drivers and Set Distribution – B-Double Drivers, it is agreed that hours worked and kilometres travelled while performing pick-up and delivery work (transactions) will, as applicable, count towards the calculation of:
(i)entitlements under clause 5.1, and
(ii)the kilometres used for determining overtime payments in clause 5.2.
Given drivers are paid a rate calculated by reference to a [sic] kilometres driven, a driver, will be deemed to have performed the following kilometres for each Transaction undertaken;
·Set Distribution Driver Single – 69.74km
·Set Distribution Driver B-Double – 66.18km.”
Clause 6 provides for calculation of distances. It is to be recognised that the calculation of distance is by reference to “deemed distance”.
Consideration
The appellant’s submissions are with respect not well directed to the question presented by the first ground of the appeal that the Arbitrator applied the wrong test to s 44E. Notwithstanding and for the reasons that follow, Ground 1 of the appeal is made out and the appeal is upheld.
The Arbitrator was persuaded that the “fair work instrument” converted the kilometres travelled to ordinary hours of work such that there is a base rate of pay which is separate from the overtime and shift allowances.[16]
[16] Reasons, [51].
The Arbitrator did not fully address the requirements of s 44E(1).
As the appellant correctly submits, s 44E(1) provides for the determination of the “ordinary earnings” of a worker for the purpose of determining the PIAWE by addressing 2 categories of worker: firstly, workers whose “base rate of pay is calculated on the basis of ordinary hours worked” in s 44E(1)(a); and, secondly, “in any other case” s 44E(1)(b) applies.
The question to be addressed is in which category is Mr Hall’s employment?
The essential factual question is whether Mr Hall’s base rate of pay is calculated on the basis of ordinary hours worked?
The base rate of pay is defined by s 44G as “the rate of pay payable to a worker for his or her ordinary hours of work”, subject to various amounts which are to be excluded.
Subsection 44G(2) provides:
“In relation to pre-injury average weekly earnings and current weekly earnings, if, at the time of the injury:
(a) a worker’s base rate of pay is prescribed by a fair work instrument that applies to the worker, and
(b) the worker’s actual rate of pay for ordinary hours is higher than that rate of pay,
the worker’s actual rate of pay is to be taken to be the worker’s base rate of pay.”
The Arbitrator did not make a determination as to whether Mr Hall’s base rate of pay under the EA was greater than his actual rate of ordinary pay. Neither the appellant nor the respondent have made any submissions on this issue.
The EA provides that the rate of pay payable to a worker for his or her ordinary hours of work is the amount set forth in the table to clause 5.1. That is to say, a minimum of $1,055.28 for weekly base kilometres of 2,515. The reference to the hourly rate of $27.7705 is an equivalent hourly rate “for purposes of leave under the NES”. The “NES” is the National Employment Standards (EA clause 7.1).
The EA makes the “rate” of pay dependant on the amount payable with respect to the kilometres travelled.
The final sentence of clause 5.1 makes this even clearer. In the event that the driver does not perform the weekly base kilometres and subject to the proviso, the driver is paid for the actual number of kilometres travelled at the rate specified in 5.2.
In Mr Hall’s case the rate specified is $0.4196 per kilometre. If Mr Hall’s rate of pay was to be calculated on the basis of the ordinary hours worked, then the calculation would be the hourly rate multiplied by the number of hours.
The expression in s 44E(1)(a) “calculated on the basis of ordinary hours worked” indicates a calculation on the basis of a rate per hour multiplied by the number of hours worked. The EA does not provide for Mr Hall’s remuneration to be calculated by reference to an hourly rate.
The hourly amount in the third column is an “Equivalent hourly rate” for purposes of leave under the “NES”. In its terms that indicates that the worker’s remuneration is not calculated on the basis of ordinary hours worked. To achieve an “equivalence” between the basis of remuneration under the EA and the NES scheme, the EA provides a notional hourly rate but this is not the same as prescribing an hourly rate for the purpose of calculating Mr Hall’s ordinary pay.
For these reasons, Mr Hall’s base rate of pay was not calculated on the basis of the ordinary hours worked and the ordinary earnings of Mr Hall are to be calculated in accordance with s 44E(1)(b). The appellant’s submission[17] is correct and the Arbitrator’s conclusion to the contrary at [51] of the reasons is incorrect.
[17] Appellant’s submissions, [16].
As indicated above the Arbitrator did not determine the “actual earnings paid or payable” in relation to a week in the relevant period. It follows that I cannot determine the ordinary earnings of Mr Hall under s 44E(1)(b). Unless the parties can reach agreement, the matter will need to be remitted to the Arbitrator to determine this amount.
Ground 2 – The Arbitrator erred in fact and law in finding that the appellant’s earnings were calculated on the basis of ordinary hours worked
Appellant’s submissions
The appellant submits that post 52 weeks the ongoing entitlements are governed by s 44E(1)(b) and not by s 44E(1)(a) because the worker’s base rate of pay is not calculated on the basis of ordinary hours worked.
Respondent’s submissions
The respondent submits that the Arbitrator was correct to apply s 44E(1)(a) but submits further:
“21. Should the appellant succeed in establishing the learned Arbitrator erred in determining the appellant’s PIAWE in accordance with s 44E(1)(a) as opposed to s 44E(1)(b), the respondent submits that this would not fundamentally change the way in which the appellant’s PIAWE is calculated by the learned Arbitrator.
22. The evidence of the appellant’s actual earnings during the relevant period are the pay slips contained in the Reply dated 4 August 2020. It was these pay slips, together with the EA, that formed the basis of the calculation of PIAWE.
23. … ultimately the calculation of PIAWE required determination of the appellant’s base rate of pay and overtime and shift allowances separately in accordance with sections 44C and 44E(1) of the 1987 Act. The actual earnings paid to the appellant included earnings that can be considered either ordinary earnings or overtime and shift allowances.”
Consideration
For the reasons advanced above, in my view the calculus should be based on s 44E(1)(b). This ground of appeal is made out.
Ground 2 of the appeal is upheld.
The appropriate remedy is for a remitter to the Arbitrator to calculate the post 52 weeks PIAWE by reference to s 44E(1)(b).
The above is dispositive of the appeal. I add, s 44C(1)(b) requires overtime and shift allowance payments to be deducted for the post 52 week period irrespective of whether s 44E(1)(a) or (b) applies. The EA expressly recognises overtime in clause 4 (sub-clauses 4.1.2, 4.1.3 and 4.1.4) and clause 5.2.
Although the starting point is different, depending on which of s 44E(1)(a) or (b) applies, s 44C of the 1987 Act requires that overtime and shift allowance payments be excluded in calculating the PIAWE for the period commencing after the first 52 weeks for which weekly payments are payable in all cases.
The reality is, contrary to the position taken by the appellant, as recorded by the Arbitrator at [6] of the reasons for the post 52 week period the overtime etc components have to be excluded irrespective of whether s 44E(1)(a) or (b) is applied. This follows from the operation of s 44C(1)(b) and (5).
CONCLUSION
In my view the correct provision is s 44E(1)(b). It is to be hoped that having regard to these reasons the parties could resolve the dispute by agreement. If not, the matter should be remitted to the Arbitrator for determination in accordance with these reasons.
The Arbitrator should determine the appellant’s entitlement applying s 44E(1)(b).
DECISION
Order 1(b) of the Certificate of Determination is revoked.
The matter is remitted to the Arbitrator to determine the appellant’s PIAWE after the first 52 weeks of weekly payments in accordance with these reasons.
Geoffrey Parker SC
ACTING DEPUTY PRESIDENT
6 October 2021
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